I have seen recent mention of millionaires, and how it is not possible to ever get there without big incomes. Yet I am convinced that on this board anyway, there are many with modest incomes and large net worth.

Not to upset anyone, but excluding:

inheritances
home equity
pensions (their equivalent worth).

If you have at least 1 million in stocks, bonds, cash, CDs, etc. amongst retirement and nonretirement accounts, how much was your household's peak earning years? But please do not vote a disproportionate year, say when you got a bonus for hundreds of thousands or sold a business for a ton. It would be interesting to see how many people of modest means got to this milestone through LBYM and careful investing, or if more folks will be at the higher end of the income scale.

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I have to quibble with you a bit on the methodology. Pensions are part of the wage package but not reflected in annual income. When you exit a company and take the annuity OR roll to IRA seems irrelevant. Both are money and part of the bottom line. You failed to exclude 401K's and that usually has a corp contribution. Most millionaires did not just save... They looked at all the options and LBYM to some extent.

I definitely understand your point. It is something like the lottery winners. Take 1 million today or the interest equivalent over the next 20 years. My point is that for the folks who physically have the dollars today, even if in 401ks, what incomes did it take to amass it?

Admittedly, folks with bigger pensions might earn less each year, and even have less incentive to save, knowing they have the pension to rely on.

If I did it correctly, 8% would get you there.
Excel function: =FV(0.08,20,22000)

That would mean that if someone were earning 100,000 today and after taxes and expenses saved 22,000 each year, they would have 1 million only 20 years later at 8%. Obviously with inflation they would likely save more and their ending point would increase, but in real terms they dcould get to 1 million without LBYM too greatly. With 2 people working the whole 22,000 savings could be in a 401k with before tax money.

=With 2 people working the whole 22,000 savings could be in a 401k with before tax money.

Historically, that may not be true. Remember, I wrote 1987 and I'm not sure the 401k limits were high enough in the early years of this scenario to allow $22K in contributions. But it is true that if one banked the working spouse's income instead of spending it, then a million is essentially trivial to reach for a working couple.

Discipline, discipline is the way from early on and compounding will do it. Do not let the rest of the World figure it out --- where would inflation be then? Only the disciplined deserve the fruits of their savings. (don't know who to quote one).

At some point, your investments will grow as much, if not more, than what you are adding from your earnings. At that point, you can make a decision either to keep working and pumping money in, or become semi-retired and earn just enough to meet your living expenses while your investments grow on their own to the point that will sustain you for full retirement.

__________________No man is free who is not master of himself. --- EpictetusEnjoy Yourself (It's Later Than You Think). --- Guy Lombardo

1966 to 1992 wages 8 to 60k. Note that index funds/company 401k showed up 1977. DCA the best I could - crossed 1 mil the last few years - a little short of forty years after 1966. Retired 1993 with about one year temp work in the stretch.

Some folks reach a high net worth by investments - not savings. Building and selling a business, for example, or stock options. In those cases the return can be hundreds of times the original investment.

Historically, that may not be true. Remember, I wrote 1987 and I'm not sure the 401k limits were high enough in the early years of this scenario to allow $22K in contributions. But it is true that if one banked the working spouse's income instead of spending it, then a million is essentially trivial to reach for a working couple.

Actually, when 401k plans were implemented back in the halcyon days of the 1980's, one could put 15% of one's gross income (up to a max of 30K) into a 401k plan.

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